South Florida plays host to over 1,200 multinational corporations with offices here and overseas, including more than 300 Fortune 500 companies with regional or worldwide headquarters in Miami-Dade County. Managing a multinational company’s workforce presents the challenge of how to manage employees uniformly and consistently while still addressing the diverse local laws that apply across borders.
Historically, companies simply allowed local laws to dictate their policies and practices in each country. The result was a disjointed approach to management where each country had different employment contracts, policies and procedures. This fragmented approach exposed companies to compliance risks, resulted in duplicative or conflicting policies, and created challenges for day-to-day operations.
Today, as companies operate on an increasingly global scale, the need for a global approach to human resource management is ever present. A cross-border view of workplace policies, procedures and practices mitigates risks, ensures compliance, facilitates recruitment and retention of key talent, and contributes to a common corporate culture. This can be accomplished by navigating across diverse geographical and legal landscapes to establish overarching global personnel policies and procedures (on topics where it is possible), and limiting country-specific policies and procedures to topics that address local legal and cultural nuances. How does this help the multinational?
First, global policies allow for better integration and productivity across a global platform and can foster a uniform outcome driven corporate culture. Such policies also create efficient and streamlined operations by allowing human resources functions to be centralized. Similarly, global contracts and employee handbooks, with local supplements where necessary or appropriate, can help companies impose reliable and consistent protections for confidential and proprietary information.
Second, global codes of conduct and compliance programs can help ensure compliance with legal regimes — like anti-corruption, anti-bribery, and anti-money-laundering laws — that apply broadly beyond national borders. For example, overseas employees of certain companies must comply with certain U.S. laws (e.g., Foreign Corrupt Practices Act). Similarly, aligning a multinational’s equal employment opportunity and harassment policies can prove especially useful where the workforce is mobile by propagating a baseline corporate culture of respect and reducing liability exposure. For example, a U.S. citizen assigned by a U.S.-based multinational to work overseas is simultaneously protected by U.S. and local anti-discrimination, anti-harassment and anti-retaliation laws. If this employee claims to have been sexually harassed while overseas, the employer may face exposure both in the U.S. and the host country. If the multinational had proactively aligned its harassment policies across its operations, it may have prevented a cognizable harassment claim in the first place, and it will more likely have mitigated liability exposure.
Third, having uniform approaches to employment contracts, modified only to accommodate local law requirements, provides consistency amongst employees in similarly situated positions.
Fourth, establishing global policies can have substantial value from a public relations and marketing perspective. This enables a company to market its adherence to standards above what may be required in certain countries in which it operates and to foster an image of corporate social responsibility.
Global employers should reflect on whether they are uniform or disjointed in managing their workforce. For those that are disjointed, a multinational law firm, with resources across disciplines and borders, is well situated to guide a global employer through reviewing all existing (and sometimes conflicting) policies and procedures to formulate a management approach that strikes the right balance between centralization and localization.
April Boyer is a partner and Yamilet Hurtado is an associate in K&L Gates’ Miami office, where they counsel and represent multinational employers in connection with the firm’s Global Employer Solutions practice.